From piggy banks to that first savings account, many children are taught the value of saving from an early age.
But as they grow to adolescence, following parental advice sometimes gives way to peer or media influences, and those once-thrifty children are now teenagers in a consumer-driven
world where spending, not saving, is king.
“Nearly everyone falls into two categories: spenders and savers,” says John Cortines, co-author with Gregory Baumer of God and Money: How We Discovered True Riches at Harvard Business School (www.godandmoney.net). “Spending is easy, so it’s up to parents to start conversations with their teens on the importance of saving and, just as importantly, giving.”
Cortines and Baumer suggest three ways parents can help teens establish good financial habits before they reach adulthood, and pave the way for those teens to become generous people as well as good savers:
• Help them begin saving for retirement now. Teens who land a part-time job often want to save money to buy a car or they simply want to enjoy a little financial freedom with weekend shopping sprees. Unless they’re careful, that money burning a proverbial hole in their pocket is spent before the next payday. Parents can help them think beyond today by suggesting they invest a portion of that income in a Roth IRA. Mom and Dad can even consider matching their teen dollar-for-dollar on their savings. “Explain the wonder of compounding investment returns – how the money they invest as a teen could be worth 10 to 20 times as much when they retire,” Cortines says.
• Family philanthropy. Even if the gifts are modest, Cortines and Baumer advocate involving teens in the family giving plan. Encourage them to research charities and apply for “grants” from the family’s budget for giving. “The experience of learning about nonprofits will be invaluable,” Baumer says. This is also where another portion of the teen’s earnings from a part-time job could be placed.
• Let them into your journey. Parents should model what they want their teens to emulate. Cortines said this begins with “letting them see your character as reflected in financial decisions.” That doesn’t mean letting teens know their parents’ net worth or the details of their income. Baumer and Cortines suggest explaining to teens how living modestly has short- and long-term benefits, whether it has allowed an early payoff of a mortgage, or demonstrates that frugal purchasing decisions leave money available for charitable giving.
“If you frame the conversation well,” Baumer says, “teens will benefit from seeing your character on display as you navigate your finances.”
Once saving and giving goals are fulfilled, teens can then begin to focus on spending.
“But unless spending is kept under control,” Cortines says, “saving and giving simply aren’t possible at any meaningful level.”
About John Cortines and Greg Baumer
John Cortines and Greg Baumer are co-authors of God and Money: How We Discovered True Riches at Harvard Business School (www.godandmoney.net). Baumer is VP of Business Development for naviHealth, a Nashville-based healthcare technology firm. Cortines is Executive VP of Emerging Leaders for Generous Giving, an organization that exists to share the biblical message of generosity.
A native of Indianapolis, IN, Greg Baumer grew up attending Indiana Hoosier basketball games and working with his dad every Saturday in the family business. He went on to earn his BS in finance, business economics, and public policy from Indiana University in 2008.
Greg began his career with McKinsey & Company, serving clients in a wide range of industries including manufacturing, retail, and healthcare. He then worked as an investment professional for the private equity firm Advent International, where he focused on investments in the healthcare sector. After earning his MBA from Harvard Business School in 2015, Greg joined Nashville-based healthcare technology startup naviHealth as vice president of product development and innovation.
It was while taking a Harvard Divinity School course called God & Money that Greg began to think deeply about the intersection of faith and finance. As he came to the startling conclusion that underpins God and Money (formerly titled Through the Needle)—that Christians are called to a radical level of generosity—he began to move beyond tithing and embrace a financial strategy centered on giving. Greg now hopes to experience the incredible joy and satisfaction that comes only through generously serving God with his wealth. He also aspires to participate in the mobilization of God’s church to launch a wave of generosity never before experienced on earth.
Greg is blessed to be married to his beautiful, loving, and gracious wife of six years, Alison. Greg and Alison are parents to a happy, outgoing toddler, Grant.
After launching his career in the Texas oilfields, John Cortines has recently decided to advance the biblical message of generosity full-time, joining the leadership team of Generous Giving. Turning down a lucrative expatriate job to serve this mission has been the defining moment in his own generosity journey – a journey in which God has proven tremendously faithful. Previously, he worked for oil companies in several locations across Texas and Louisiana, most recently as a petroleum engineer for Chevron, where he conducted complex decision and financial analyses of deepwater oil and gas projects. He holds engineering degrees from Texas A&M University (BS, 2010) and KAU of Science and Technology in Saudi Arabia (MS, 2011), and an MBA from Harvard Business School (2015).
In the research that informs God and Money (formerly titled Through the Needle), John brought his pragmatic analytical approach to a question that has always intrigued him: how should wealthy Christians handle their money? What does scripture suggest about the dispensation of riches? The result was a simple yet radical framework for managing wealth that John himself, a lifelong Christian steeped in biblical teaching, found transformative. Once content to live simply, give some, and save aggressively to attain personal security, he now sees active giving—sharing resources joyfully and generously—as central to a way of life that serves God.
John is deeply blessed to be married to his beautiful and gracious wife, Megan. They have a growing family that currently includes Jack (2) and Anna (0), and now reside in Orlando, FL.